How Employee Retention Is Directly Tied To Customer Service and Loyalty

As the banking industry changes and adjusts to the new technology of the information era, many are wondering what they can do to improve their customer retention. Building customer loyalty is often the key to success in an increasingly competitive banking industry.

excellent-customer-service

Yet, just how can one go about building that customer loyalty? The answer is not in more programs or services. Interestingly, the answer may be in building up employees to improve employee retention.

Historically, banks that have high employee retention have high customer satisfaction. While no formal studies have been done as to why this is true, a bit of logical thinking will show why. When your employees are happy in their work and stick around for decades, that happiness and satisfaction is spread to the customer. The end result is better customer satisfaction, which often translates into better overall profits for the bank.

Customer ­Facing Employees Essential to Customer Retention

 When customer walks into your bank branch, it’s not your products or your investment opportunities that keep that customer with your bank. Chances are high that your competition has something similar to offer. For most people it is the customer ­facing employees that keep them coming back.

When the teller or personal banker knows the customer’s names and is able to offer products and services that meet customer needs, the customer, in turn, is satisfied with the service and desires to continue doing business with your bank.

When, on the other hand, that customer­ facing employee changes frequently due to employee turnover, the customer experience begins to suffer. A relationship is impossible to build when the service provider is constantly changing, and the customer’s loyalty is no longer stimulated. Should your competitor offer a better service, the customer will be more likely to make a switch.

Because of this direct connection between customer loyalty and satisfaction and retention of employees, it makes sense for banks to work on building a culture that encourages employees to remain employed by the bank. Overall, this improves the bottom line for the bank and the image the bank has in the local community.

      Strategies to Improve Employee Retention

No matter how well structured your banking organization is, you will have some employee turnover. It’s simply the nature of the industry. That said, banks can take specific measures to improve their employee retention and, in turn, improve their customer satisfaction.

First, create a company culture of mutual respect. When employees feel respected by their employer and their co­workers, they are happier to come to work and are able to serve customers better. When their thoughts turn to moving elsewhere, that positive company culture can go a long way.

Next, hire from within. When you have a position and an employee who clearly fits the bill, you will boost company morale and encourage other employees to stick with their positions by hiring from within. While you may have times that you need an outside influence, in many instances your employees will be the best hires for an opening you have. This encourages employees to continue working because they have the hope of being promoted, knowing that your company culture emphasizes hiring from within.

Finally, make your branch managers the decision makers for the branch. This gives your local employees some ownership in what happens in their banks. While you will still need to make some decisions on a corporate level, whenever possible allow the bank managers to make decisions for their branches. Lending authority, for example, can be handed to branch managers. This will improve customer service by giving customers instance access to the information they need, and it will improve employee retention by giving those in the trenches the ability to make decisions as they need to.

By changing your bank’s focus to one that emphasizes customer and employee satisfaction, you will be poised for success.

Emphasize Digital Solutions While Keeping Banks Human Factor

Emphasize Digital Solutions While

 

As more bank customers want digital apps that allow them to complete transactions from their mobile devices, banks should equally emphasize their personal touch and human factor. Financial institutions employing the most up­to­date technology can improve the efficiency of their operations. However, also stressing the human factor is more important than ever.

Outstanding customer service, at the root of the depositor/borrower demands for high tech ability, is still driven by human interaction. Superior customer service is the primary reason for these demands. However, people still want to deal with people, particularly when it involves their savings and loan accounts..

The Impact of the Human Factor in the Digital Universe

 

New digital technology is amazing. The ability to perform almost all banking transactions from PCs, tablets and smart phones is overtaking the bank world. However, the advantage appears to be with those banks remembering that the personal touch differentiates them from their competition.

Those financial institutions that heavily use the human factor in combination with offering the most cutting edge digital apps, stand above the crowded bank landscape. Engaged bank customers care about their institution and its employees. This can make a significant difference in the bank they choose as their primary financial institution (PFI).

Emphasizing digital features, along with the human factor, impacts banks in at least two important ways.

    • It satisfies the overwhelming customer demand for the latest in technology
    • It emphasizes the bank’s ‘customer first’ focus.

Since banks in the U.S. and Western Europe are heavily regulated, it becomes challenging to differentiate one from another. Unlike other consumer retailers, banks cannot offer incredible discounts in deposit or loan services. Yet, they must find ways to distinguish themselves from their competition to be successful.

This situation presents numerous difficult challenges to banks. The solution: Banks should offer the latest high tech digital abilities, with strong back up from their human professionals. Bank customers who have built lasting relationships with bank personnel (at all levels) typically are loyal to their institution, as long as it offers the high tech features customers want.

Customer Innovations

 

According to PA Consulting, the need to use the traditional human factor is a “wake up call” for the world’s banking community. While customer innovation is important, it’s only as vital as emphasizing traditional human values.

When a bank’s customer base loves technology and social media, financial institutions make significant personal connections when offering the most recent tech apps. However, while Internet­only, non­branch banks can be effective in B2B environments, B2C banks flourish when using the personal touch, in addition to their high tech offerings.

Internal Innovations Help Bank Customers

 

With the internal bank management innovations becoming more innovative, some tech software features, particularly from top innovators, like Banktel, also deliver bank customer benefits. For example, Banktel’s vendor management app typically improves bank customer experiences, along with lowering financial institution costs.

Increasing banks’ bottom lines, using cutting edge software, allows financial institutions to offer depositors/borrowers better terms and interest rates. These internal innovations permit banks to offer more advantageous terms to their consumers. When banks use internal tech advances to offer better terms to customers, they stand above their crowded competitive universe.

Bank customers appreciate these relatively small competitive advantages, as they need to do business with someone. When their PFI offers the most recent technology in combination with caring, human intervention, people appreciate their bank’s concern for maximizing their money and convenience.

Regulators focus on bank safety and stability. Customers focus on outstanding rates, terms and service. These seemingly divergent objectives, however, are related. Consumers want their PFI to be safe and secure, but also offer the maximum in better terms and cutting edge digital ability.

Customer digital innovations, matched with the human factor, achieve both goals. Using internal management software further enhances the customer experience and satisfaction. Banks that offer the optimum in technology, supported by their human personnel, enjoy the most success—as do their customers.

PA Consulting:
http://www.paconsulting.com/our­thinking/digital­banking­keeping-the­personal­touch/

Hidden Costs for Banking Transactions You Must Eliminate

Hidden Costs for Banking Transactions

 

How profitable are your banking transactions? While the number of transactions is increasing at a steady rate for the modern bank, many of the transactions being carried out today are simply not profitable for the bank. The number of hidden costs associated with the transactions added to the overhead cost of facilitating those transacts eats the bank’s profits. If you are going to make a profit as a banking entity, you need to be able to find, and then eliminate, these costs. You also need to develop working strategies to handle the inevitable “zero revenue” transactions.

It’s important for banks to realize that most of the hidden costs are not cut­ and­ dried fees. They are the operated costs behind making the transaction. While you may pay $0.10 per mobile transaction, for example, you must realize the number of other costs you pay to complete that final transaction, including paying for the software, the people to run the software and the IT professionals who step in when the programming does not work. Here are some common types of transactions that have hidden costs that are eating your revenue.

Double Costs During Core Banking Renewal Periods

When you are making the transition between two core systems, you will often have a period of time when you are running two systems at the same time. This creates two parallel costs from the two parallel core systems. With separate software monitoring and reporting on the old and new programs, you end up with double the expenses.

How can you avoid these costs? When making the transition from an old core banking system to a new one, explore opportunities to use one monitoring system for both systems. Not only will this lower costs, but it also gives you more accurate results, as you will have the same type of data from both the old system and the new system.

Fees in Mobile Transactions

Today’s consumer demands an easy­ to ­use mobile experience, yet the customer ­facing experience is just a drop in the bucket of the entire mobile experience. The back­end processes can be quite complex and involve multiple systems in order to get back that transaction back to your bank. When implementing mobile transactions at your bank, make sure you understand all of the hidden handling costs across the process. This may go beyond the few cents advertised for the transaction by the service provider. Look for services with minimal handling costs and a good customer ­facing experience to make mobile banking both convenient for your customers and profitable for your bank.

Costs for Analytics

Your retail team relies on detailed reports to make wise sales decisions, but have you looked at how much those reports cost to produce? While not a fee, per se, these costs can limit your profits. Also, the labor ­intense processes often employed to create analytics can cause the data, which your retail professionals rely so strongly on, to be outdated and ineffective.

Finding more efficient ways to gather and use this data will help limit costs and increase productivity. Finding Problem Transactions Problem transactions are a costly fact for today’s banks. Sadly, the fees charged to the customer do not come close to covering the fees paid by the bank to track down the problem, in almost every instance. Add to this a marketing push to cut overdraft fees and fees for bounced checks, and you have a costly situation for the bank. Making this area of your bank more efficient will help cut down on the constant fees that make these problem transactions a true drain on your resources. This, in turn, will limit the number of zero revenue transactions your bank completes.

As a bank, you must learn to track down these hidden costs in order to remain competitive and profitable. Find, and then eliminate, these costs to make your bank as efficient and effective as possible.

Will the Eliminating Risk Retention Provision of the Dodd-Frank Act Bring Back Risky Mortgages?

Will the Eliminating Risk Retention

 

The Wall Street Journal headline reads “More Risky Loans Allowed.” It is a non­ subtle “shot” at Washington for eliminating the risk retention provision, once a primary component of the Dodd­-Frank Act, forcing mortgage lenders to retain, at least, a small percentage of every mortgage sold into the secondary market. The focus was to effectively prevent another housing bubble, replete with its unfortunate “boom and bust” features.

The Federal Housing Finance Agency, in its attempts to expand credit and lending, supports lowering down payment minimums back to three percent. Late October 2014 also saw the Federal Reserve (and other regulators) approve rules that permit private mortgage­-backed securities with no down payments of any level. Dissenters note that bureaucrats should never be allowed to dictate terms of private contracts of any type.

New Congress Reforms?

Since the midterm elections are now a fait accompli, it appears the new Congress is charged with creating significant reforms in the housing market financing arena. Until or unless that happens, Fannie Mae, Freddie Mac and the FHA (Federal Housing Administration) will still dominate the housing finance market, as they have in the past.

The original Dodd­-Frank Act (2010) referenced “qualified mortgages,” as those eligible for sale or securitization in the government­ related mortgage financing market. Qualified mortgage sales included a provision that forced lenders to retain a percentage, originally at least five percent, of the mortgages they sold.

The theory: Instead of selling 100 percent of their mortgages, leaving zero risk for banks and other direct lenders, they would retain some risk of default, unlike the unbridled lending in the residential market during the first decade of the 21st century. After passage of the Dodd­-Frank Act, the common phrase became “everyone has skin in the game,” noting that all participants had some risk for losses.

Skin in the Game—Or Not?

The Wall Street Journal calls the new rules, the “no ­skins game,” since borrowers need not have any deposit and lenders need not retain risk. The regulators continued to use the phrase “risk retention rules,” even as they waived the original minimum retained ownership regulations.

When the new Congress debates mortgage reforms, it will face mounting pressure to eliminate the no risk modification before a new housing bubble rears its dangerous head. Reforms that stimulate safer lending are welcome; another housing bubble and the inevitable meltdown that follows are not.

Another “feature” of the new rules may be even more damaging to the business community. Regulators mandated lender risk retention for “leveraged loans.” This financing involves bank loans to companies already carrying heavy debt loads.However, regulators placed the five percent risk retention rule on the buyers, not sellers, of these contracts.

Opponents rail that there is neither logic nor accountability on the banks or lenders making these risky loans.

Regulator Motivation

Whatever the regulators’ motivation, an unintended consequence may potentially surface. This initiative may well discourage lending to commercial organizations. Should investors rebel at the percentage of leveraged loans in collateralized loan obligations (CLOs), the market for loan purchases may dry up. Lenders would then be forced to keep business loans in their portfolio, while assuming all of the risk of default. Since the Fed has now ceased its massive investment in mortgage securities and CLOs, the potential problem could quickly escalate. With low credit spreads already squeezing profit margins, adding further risk to questionable loan packages could turn off the secondary market faucet. Christopher Dodd (Senate Banking Committee) and Barney Frank (House Financial Services Committee) had envisioned a much different outcome for their Wall Street Reform and Consumer Protection Act. Intended to consolidate regulatory agencies, better safeguard financial markets and create tools for managing financial crises. The Dodd-­Frank Act objectives appear to be sidestepped in the latest regulatory action.

Profitability and Asset Preservation

Although profitability remains a primary goal of banking institutions, the lessons learned during the housing and mortgage crisis taught many about the equal importance of asset protection. It appears that, before the housing bubble burst, even experienced lenders may have downplayed the asset preservation factor. The recent regulator actions may give Congress stronger incentives to modify, if not rewrite, the Dodd­-Frank Act, including addressing the repeal of the well­-intentioned “risk retention” provisions. While some of those new to the banking industry may welcome the lack of “risk retention” regulations, seasoned bankers who lived through the Great Recession understand the major role asset preservation plays in keeping financial institutions strong, stable and viable.

How Smalltown Branches Must Adapt

How Smalltown branches Must Adapt

 

Between 1984 and 2011, the number of federally insured banks shrank significantly in the United States, with the majority of bank closures being those with less than $100 million in assets, according to the Wall Street Journal. Small banks are being gobbled up by larger banks, until the industry has reached an all­-time low, with just 6,891 federally insured institutions in the United States at the end of 2013. Those small town banks that have withstood these changes have faced a need to adapt in order to remain relevant in the modern banking market.

Small­Town Bank Challenges

Community banks are facing unique challenges in the current market. First, small towns are not growing, on average. While there are some pockets of growth in rural America, the shift is for people to move toward urban centers, where business and economic opportunities exist. Between 1980 and 2010, half of the country’s rural communities lost a significant among of their population. A shrinking customer base makes income ­generation difficult.

In addition, these banks find that their population is aging. Younger families are moving towards the jobs and opportunities in more urban areas, while their regular customer base is getting older. This prevents these banks from feeling a push towards embracing new technology, and this is to their detriment.

So small-­town banks are facing the need to maintain their branch network, which is an expensive proposition, with a shrinking customer base, low branch traffic and a lessening in the total number of transactions generated. This is creating a situation wherein the bank simply cannot succeed economically.

How Small­Town Banks Must Adapt

In order to adapt to these challenges, the community bank must learn to find opportunities in their niche. While rural America, as a whole, is shrinking, some parts are growing. In addition, there are under served areas that are in need of banking services. Banks need to learn to find these markets and tailor their services to them. Once a needy area or area of growth potential has been identified, then the bank needs to create a strategy that will allow them to become the dominate banking force in that area.

Technology is going to be essential to this change as well. Technology can help streamline the back­end aspects of running a network of community bank branches. This can lower expenses and eliminate some paid positions within the bank, so the bank’s overall profit margin is higher. Offering customer’s technology to use on their end can also help retain the younger demographic while improving customer service to older banking customers. Customer-­facing technology also keeps the bank’s name in front of the consumer at all times, helping keep customers happy with their local bank.

If these strategies do not bring enough income to remain afloat in a changing market, the bank may need to consider expanding, with caution, into metropolitan markets. Most rural markets are located near metro areas, and banks can expand into the suburbs successfully if they plan the expansion right. This strategy can, however, be dangerous, as marketing in a metropolitan area is significantly different than marketing in a rural area, but it may be the solution that today’s community banks need to consider.

Are the days of the small­town bank at an end? Probably not, but these banks are going to need to adapt in order to survive. National and city banks are using technology to reach the rural customer. In order to remain competitive, the rural bank is going to need to make some changes as well.

Gov. Phil Bryant Recognizes Four Mississippi Companies at 2014 Governor’s Awards for Excellence in Exporting Event

Boyce Adams Award

Jackson, Miss. (Dec. 4, 2014) – Gov. Phil Bryant presented four Mississippi companies with awards yesterday at the 2014 Governor’s Awards for Excellence in Exporting event, which was held at the Country Club of Jackson. Designed to recognize Mississippi companies for their success in maintaining or increasing export sales, the awards recognized two companies in the service sector and two companies in the manufacturing sector.

“I am proud to honor these four homegrown companies for their excellence in exporting. Not only did these companies and their leaders think outside of the box when creating their innovative, high-tech products and services, they thought internationally,” Gov. Bryant said. “They are showing the world that Mississippi has what it takes for companies to grow and be successful while helping create jobs and improving the quality of life for individuals right here at home and around the globe. I thank them for their dedication to the state of Mississippi and congratulate them on this exciting day.”

Columbus-based BankTEL Systems, provider of financial accounting and cash management software, received the Governor’s Award for Excellence in Exporting in the service sector. Hattiesburg-based BioSoil Enhancers, the sole manufacturer of SumaGrow, received the award in the manufacturing sector. SumaGrow increases crop quality and yields while decreasing chemical fertilizer inputs.

Gov. Bryant also presented the Governor’s Award for Export Achievement to Jackson-based Navagis and Pearl-based Trilogy Communications, Inc. Navagis, provider of Enterprise Visualization Management software, received the award in the service sector. Trilogy Communications, manufacturer of advanced technology coaxial cables, received the award in the manufacturing sector.

Nine additional companies received certificates of achievement at the event for their successes in exporting. These include Horn Lake’s Shannon Lumber International; Hyperion Technology Group from Tupelo; Flathau’s Fine Foods from Hattiesburg/Petal; Wood Industries, Inc., from Belmont; DeBeukelaer Cookie Company from Madison; Goldin Metals, Inc., from Gulfport;

Griffin, Inc., from Byhalia; Quality Plywood, Inc., from Waynesboro; and TJ Beall Company of Greenwood.

“The companies honored with these awards play a large role in strengthening the state’s economy, as well as that of their local communities. Additionally, they epitomize the talent, innovation and pioneering spirit found in Mississippians throughout the state,” said Mississippi Development Authority Executive Director Brent Christensen. “We congratulate these companies on their achievements and look forward to watching their continued growth and success.”

The 2014 Governor’s Awards for Excellence in Exporting were sponsored by MDA and the Mississippi District Export Council.

###

About Mississippi Development Authority 

Mississippi Development Authority is the state of Mississippi’s lead economic and community development agency. Approximately 300 employees are engaged in providing services to businesses, communities and workers in the state. While the agency is best known for its efforts to recruit new businesses to Mississippi, MDA provides services to promote tourism, help communities improve their quality of place, help existing employers identify and meet opportunities and challenges and help workers improve their skills – all with the goal of improving the quality of life and economic well-being of Mississippians. For more information, visit MDA’s website at www.mississippi.org

Contact: Tammy Craft, MDA Public Relations             (601) 359-6556

tcraft@mississippi.org                                                     (601) 383-4806

How Integrated Accounting Software Can Help Banks Prosper

How Integrated Accounting Software Can

 

Whether you’re a community bank or a national company with multiple branches, integrated accounting software can help you save time and money. Specialized banking applications can help your financial institution streamline daily tasks such as accounting, budgeting, asset management and more. This not only improves competencies within the organization, but helps you provide faster service to clients and vendors.

So, what types of tools are out there? Industry­savvy financial software companies like BankTEL offer tailored solutions to simplify your bank’s managing and reporting tasks. Below are a few examples of helpful tools:

Accounts Payable

With designated accounts payable software, financial institutions can efficiently track and manage invoices and approvals, make EFT and direct deposits payments, withhold payments, and manage tax rates and scan paper invoices directly to file. Reduce clutter by scanning paper invoices directly to file. It’s a cost­effective way to save time and stay in good standing with clients.

Fixed Asset Management

A fixed asset application can help your institution sell, discard, or transfer assets across branch locations and clusters. Advanced software lets you sort and pull up reports by category, location, and time, making budgeting a snap. Other helpful features may include tax reporting with built­in tax code compliance, advanced forecasting tools, and compatibility with a variety of inventory scanning systems.

Vendor Management

How a financial institution handles vendor risk ratings plays a huge role in its long­term profitability. Risk management software helps banks keep tabs on multiple contracts and manage vendor ratings in compliance with FDIC guidelines. Ideal vendor management software allows institutions to add files to vendor records, scan multiple file types, apply compliance codes. and receive email updates on regulatory changes and contract term renewals. It all adds up to a more organized operation and greater peace of mind.

Expense Report Management

Without streamlined expense reporting tools, banks may be surprised by unexpected costs. Keep track of your bank’s operating and travel expenses with integrated reporting tools your entire staff can use.Management can approve or decline trip budgets and analyze the company’s costs on multiple levels. It’s an excellent way for banks to uncover otherwise obscured expenses, redefine their cost structure, and plan future budgets.

Advanced Budgeting Tools

Banks can take the bottlenecks out of budgeting with advanced cloud­based tools. Create and distribute master budgets to all levels of your organization. Quickly import financial data from various file types into your budgeting platform. Create budgets on the computer, or on your tablet or smartphone. Define and send finished budgets to unlimited approval tiers, and export them to other reports including general ledgers. Flexible customization tools let banks mold the software to their organizational structure, saving time and money.

Shareholder Management

Managing your company’s stocks and dividend payments doesn’t have to cause headaches. Heavy­duty
shareholder management software lets you compute and print dividend checks, file tax forms, export reports
to an array of file types, and manage shareholders. You can even simplify the handling of stock splits and
designated payment types including Sub­S and C­Corp.

Integrated Training Courses

What’s the use of investing in financial accounting software if you and your staff can’t figure out how to use
it? Experienced software companies like BankTEL know your time is valuable. That’s why BankTEL offers
free online training courses that give you the knowledge and skills you need to make the most out of your
new software.

It all comes down to cutting costs and bettering service to attract and maintain customers. With over two
decades of experience and locations across the country, BankTEL helps thousands of clients save money
and boost productivity every day.

Bank Vendor Management Software Controls Outsourcing Costs

Bank Vendor Management Software Controls

 

As outsourcing becomes more popular with banks, financial institutions face more risks than typically exist when using its employees to perform most tasks. Yet, one reality takes precedence over other issues. Banks and credit unions can outsource most services, but they retain all potential risks to their operations and customer requests for service. According to FDIC regulations, insured financial institutions can neither abdicate nor transfer responsibility for safe and sound operational procedures via outsourcing.

FDIC Position on Vendor Management and Risk

FDIC regulatory concerns regarding vendor management have existed for years, at least dating back to the Bank Service Company Act (1999). Since 2001, outsourcing and vendor risk management policies have taken center stage as regulator priorities. The Gramm­Leach­Billey Act (1999) further clarified the government’s position on third­party vendor services and management. Along with repealing some provisions in the iconic Glass­Steagall Act (1933), which set restrictions on financial institutions during the Great Depression disaster, banks initially welcomed many GLBA provisions, which allowed financial institutions to expand into offering investment and insurance services for customers. These landmark deregulation initiatives also added risk to financial institutions operations for those banks taking advantage of these new opportunities. These additional powers represent the birth of outsourcing as popular banking solutions. Instead of the nation’s financial institutions acquiring or funding investment or insurance startup organizations, many banks decided to offer investment and insurance products of other entities instead of establishing in­house companies. Outsourcing has proliferated from these modest beginnings. FDIC recognizes that outsourcing tasks to third­party vendors increases financial and operational risks to insured banks. The National Credit Union Administration (NCUA), which fills the FDIC role for federal credit unions, agrees that their institutions remain responsible for the risk of loss, regardless of performance shortfalls by employees or third­party vendors.

Vendor Management Software Helps Control Costs and Compliance

Depending on a bank’s size and devotion to outsourcing, vendor management can become an unwieldy responsibility. In­house bank personnel must manage the institution’s vendors, regardless of the vendor role. Whether responsible for delivering copy paper or acting as the bank’s call center, vendors must be managed properly to control both cost and risk. While inherently more critical than copy paper supplies to a financial institution’s brand and image, an outsourced call center with vendor CSRs (customer service representatives) mandates bank management responsibility for effective vendor control and performance. Enter state­of­the­art vendor management software to help control expenses and satisfy regulators. Banks seeking to achieve or maintain operational excellence can use applications from top providers, such as Banktel, to benefit from electronic management and tracking of vendor performance.Among the multiple benefits banks receive are the following features.

  • Regulatory compliance
  • Efficient cost control
  • Access to up­to­date reports and data
  • Better risk management
  • Ability to measure and evaluate management efficiency, both internally and externally (vendorservices)

FDIC has published much discourse on managing outsourcing risk, while offering multiple vendor management webinar training seminars. Understandably, FDIC focuses on risk management, not cost control for compliance reasons. However, vendor management applications can achieve an equally important bank objective, controlling costs. Instead of hiring multiple, costly W­2 employees to track and manage vendors, financial institutions can save time and money by using software apps to track vendor performance. Most top vendor management applications also track the bank’s compliance efforts and results, including tickler systems to display service and payment reminders. In most cases, the best vendor management apps also include report writer capability, allowing user institutions to better format their data to their preferred layouts. For example, larger banks and credit unions face issues tracking diverse vendor contract terms, expirations and renewals along with regulatory compliance necessities. In all cases, the cost control benefits can increase bank bottom lines while maintaining vendor control and achieving regulatory compliance. Banks that have yet to consider vendor management applications should do so to learn if outsourcing this otherwise tedious necessary function can better serve the institution and manage expenses as well as vendors, while improving profitability.   Bank Info Security: http://www.bankinfosecurity.com/webinars/vendor­management­part­i­fdic­explains­how­to­manage­your­out

Millennials Find Saving Difficult Even Though They Want To

Millennials Finding Saving Difficult

Millennials, those between the ages of 18 and 34, are a target market for a lot of banks. These are the consumers who have years of saving and investing ahead of them. Yet a recent report from USA Today found that these young adults, in spite of a financially responsible mindset, are finding it difficult to save and invest.

In the report, USA Today partnered with Bank of America to perform the Better Money Habits poll of Millennials. The group surveyed 1,001 people in the 18­34 age group to determine what they believed about finances and how they were acting on those beliefs. Interestingly, the reports findings were a mixed message.
In the survey, Millennials reported feeling that they had good financial habits and were planning to live better off than their parents as older adults. Yet the report also found that a third of those surveyed were receiving regular financial support from their family. While they indicated they lived “within their means,” the report also found that many were living paycheck to paycheck.

Most interesting to banking professionals is the emphasis on getting rid of debt that this demographic had. This means that banking professionals need to target these consumers in another area, and many are turning to savings as their target product to offer to Millennials, but this may not be effective. According to the survey, many of this demographic are still unable to put away money for their emergency savings while also reducing debt, so they were having to choose between the two priorities.

Millennials Want to Save

According to the report, Millennials do want to save. In fact, 69 percent of those surveyed indicated they had a savings account, but most of them had less than $5,000 in that account. To top that off, 41 percent are stressed about not being able to put enough money away for the future. Yet, not many indicated they were successful at saving. Only 36 percent indicate they are excellent at saving money. So the desire is there, but the ability and knowledge to achieve that desire is not.

The Cause of this Struggle

What has caused so many Millennials to struggle to save, even though they want to? Some will say it is the job market. The market has been slow to improve, and wages have stagnated especially for entry-class workers. Students are graduating with th
ousands of dollars of debt that they have to begin paying off immediately. The end result is a demographic that is knowledge-rich and cash-­poor.

How Banks Can Help

As a bank, how can you help Millennials realize their desire to save while living within the confines of their current financial situation? The answer is two-­fold. First, the bank needs to focus on providing education. Millennials are used to living for the now. They are not focused on the future, and they need to be given some education about the need to focus on the future. Targeting this demographic with informative marketing materials or the services of a certified financial planner can help.

Second, these savings solutions need to be easy. In order to save, busy Millennials in the heart of their careers need it to be automatic. Encouraging them to sign up for automatic drafts, for instance, will ensure that they are consistent with saving.

Remember, Millennials are not failing to save because they don’t want to. They are failing to save because they don’t feel like they can. Provide them a way to do it that is reasonable and in line with the current financial situation, and watch as you gain more and more of these long-term accounts.